bank credit memorandum for loan by bank to the academy compa

TEST 3 (Continued) Answers 19_ The inventory system where both sales and cost of merchandise sold are recorded for each item sold is called the 19. Determining any differences between the month-end bank statement and the company\'s cash account ledger balance is called a(n) 20. Each ofthe correct answers is assigned a weight of 2N% PROBLEM 1-BANK RECONCILIATION-20% INSTRUCTIONS: Indicate the proper place for each of the following reconciling items by inserting the correct letter from the bank reconciliation form below in the Answers column. $X Cash balance per depositor\'s records Cash balance per bank statement Deductions Adjusted balance sxx Adjusted balance For 0 0. Bank charge for services rendered 1. Bank credit memorandum for loan by bank to The Academy Company 2. 2. Canceled check omitted from cash payments journal 3. 3. A note was collected by bank on behalf of company 4. Interest on above (3) note 5. Deposit of $1,000 recorded by company but not by bank 6. Outstanding checks of $1,250 7. The bank overcharged company $81 on a check .. 8. Bank debit memorandum for customer\'s check returned because of 5. 6. 7. insufficient funds 8. 9. Bank charge for printing company checks 10. Check for $45 was entered in journal as $54 ote: Eachofthe correct answers is assigned a weight of 2%. 10. Balance per book Laumens Aerm c Reconcilliation tStanding checrs epost ln ttansi t st -dated checks ATM tronsachon Banic hold cnec

Solution

Problem 1)

Items	Answers
1	C	Bank credit memorandum means bank has increased the balance but not entry is recorded in books so addition will be made to book balance
2	C	Check issued first are deducted from book balance but same is check is cancelled .since no entry is made for cancelled check it means book balance is less due to issued check amount(which has been cancelled) so added back to book balance
3	C	nOte collected Increases the bank balance ,but no adjustment is made in books for amount increase.so addition will be made in books
4	C	Additon to book balance for interest collected
5	A	Amount is already increased in books for deposit made so addition will be made to bank balance
6	B	Amount is already deducted in books for check issue so deduction will be made in bank statement
7	A	Since Bank overcharged company\'check due to error .so The amount will be added back
8	D	Bank deducted charges But not yet recorded in books .so deduction of amount will be made in books
9	D	Bank deducted for printing charges but not yet recorded in books .So deduction of amount will be made in Books
10	C	Error in recording check in Books .Excess amount was deducted so added back